Citizens Agenda on Knowledge Economy

Philadelphia’s a great place to get sick in.

It boasts a world-class cluster of teaching hospitals, medical schools, research institutions and drug companies.

And it’s a great place to be smart in. It has a glittering roster of 88 colleges and universities of all sizes and flavors.

The beneficiaries of these clusters, however, go far beyond just people who need a diagnosis or a college credit.

More than any other American city, Philadelphia relies on higher education and health as the core of its job base. And these sectors deliver, employing a diverse workforce that does all kinds of jobs for a living wage and good benefits. Education and health-care institutions also serve as international magnets for talent, bringing smart people to live here, work here, innovate here. And these institutions, with deep roots in some of the city’s oldest neighborhoods, can and do serve as engines of community renewal.

With all these marquee institutions, Philadelphia should be a global leader in the “knowledge economy,” the broad, growing sector where growth is fueled by brains and innovations, not brawn and mass production.

But it isn’t, quite. In one recent study, Philadelphia didn’t finish in the top 10 nationally on any measure of how well a region converts local research into patents, spin-off businesses or jobs. The region is, in the phrase of one business leader, “aggressively middle of the pack.” This means that, around Philadelphia, the knowledge economy is not producing as many family-supporting jobs as it should, given the city’s higher-ed and health-care assets.

A lot of factors may explain why a region has fuzzy reception for the innovative signals its research institutions emit. But business leaders here agree on the biggest problem: The region’s workforce needs to get more educated and develop more 21st-century skills.

As a whole, the region’s educational attainment is solid, but Philadelphia proper ranks 92d out of 100 cities. Knowledge economy employers are drawn to regions with deep pools of skilled labor. If the education gap, which begins with K-12 education, leads growing companies to shun Philadelphia, it could create a classic vicious cycle: Smart graduates of local high schools and colleges will look elsewhere for careers because they, too, seek regions with deep job pools in their fields.

The region has done a great job ramping up its appeal as a quality-of-life choice for young graduates, but its weak job base could undermine that campaign.

In sum, the Philadelphia region has much to work with in building its knowledge economy, but it also has much work to do:

The No. 1 Priority

More sheepskins! The percentage of residents with college degrees must rise.

Why it matters: The city’s low educational attainment hampers the region’s ability to compete in a global knowledge economy. This factor keeps the region from benefiting fully from its wealth of research institutions.

What to do: Sustain an intense, community-wide focus on ensuring that local youth get at least an associate or technical degree. Ease the path back to college for those who took credits then dropped out; the Community College of Philadelphia is vital to this goal, as is support from those who employ these adult students. Ramp-up already strong efforts around the Three E’s: luring top students to Enroll in local colleges, coaxing them to Engage with Philly while here, and helping them find Employment after they graduate.

Near-term actions

Cultivate Ivy: Create a mayoral Office of Universities and Colleges. This liaison would identify needs, advise colleges on their community-development efforts, and help with talent attraction and technology transfer.

Big “Mo” on campus: Strengthen the successful CampusPhilly operation, which has become a national model for executing the Three E’s. It needs more help from business in finding internships for students, a key piece of the strategy.

Young and restless: Bolster the parallel effort to court 20-somethings with degrees. Create forums to listen to this cohort’s goals, needs and ideas. Invite them to participate meaningfully in government and civic institutions.

Be Select-ive: Increase government (particularly suburban) support for Select Greater Philadelphia’s work to promote Philadelphia as an organic economic region stretching from Princeton to Wilmington. Believing in, and acting as, that region is the best way to compete in a global economy.

Trio harmony: Urge the governors in Pennsylvania, New Jersey and Delaware to encourage such tristate thinking and to back regional knowledge economy initiatives.

Laws of attraction: At City Hall, develop a clearer business-attraction strategy, focused on three or four promising niches where Philadelphia can build a distinctive brand. Assign a Commerce Department staffer to each sector to execute the strategy.

Long-term efforts

It’s gross, all right: Speed up the pace of cuts in the city’s gross-receipts tax, a huge obstacle to knowledge industry start-ups. Address other tax and regulatory obstacles.

Thin the alphabet soup: Reduce overlap and confusion among workforce development programs.

It’s the networks: Establish more forums (in one report’s parlance, “clubhouses”) where researchers, entrepreneurs, corporate leaders and financiers can rub elbows and trade ideas. Involve new media (e.g. online social networks) in this effort.

Incubate, incubate: Strengthen existing public-private partnerships to provide lab and office space, seed money and transition funding to “spinout” businesses that turn academic research into patents, products and jobs.

Enterprising eggheads: On campus, encourage more entrepreneurial thinking. College leaders should make it an institutional priority to inject new knowledge into the region’s economic bloodstream. Temple University is on the case here.

Venture forth: Better exploit the region’s research strength, and its proximity to Wall Street, to improve its weak supply of venture capital to support start-ups.

Career ladders: Get business and government to work with local school systems to teach students about the variety of good jobs available and the skills needed. Citizens say this information is lacking. This is a special need in the city, where populist myth remains stuck in a false opposition between “real” manufacturing jobs and lesser “service” jobs. “Knowledge economy” jobs are not lesser jobs, and there is nothing elitist about a focus on them. They include the lab technician, the data processor and the campus security officer as well as the professor, the medical researcher and the software designer. These are the family-supporting jobs of the 21st century.

Myth busting: Similarly, get civic leaders and schools to counter effectively the damaging cultural message that dismisses academic success as equal to “acting white.” The community must, in one citizen’s phrase, “sell the path” to academic success as one that everybody can take.

Ideas from citizen forums

The Apprentice – Philadelphia: Create an annual competition for students from the many Philadelphia universities with strong business programs. Invite interdisciplinary teams of students from local colleges to come up with an entrepreneurial idea, then write a business and marketing plan for it. The winning team would get seed money to start up its business, with the proviso that it must be located in Philadelphia.

Good fellows: Create more programs along the line of the successful Philly Fellows programs, to place local graduates in fellowships at businesses, nonprofits and government agencies. This would help encourage them to engage with and commit to the region.

Bet the house: Consider offering incentives – help with down payments or points, or a partial property tax abatement – to recent college graduates willing to buy a house here.

(Illustration by Tim Ogline)